Adam Smith: an Enlightened Life

The myth of Adam Smith is that he was the hard-nosed high priest of self-interested capitalism. A ne

Adam Smith's best-known book, An Inquiry into the Nature and Causes of the Wealth of Nations, still exerts an extraordinary influence, well over 200 years after it was first published in 1776. Many people know some of the book's most celebrated passages; a few even still read it. It is acknowledged as one of the founding texts of economics, and widely believed to be an apologia for unrestricted free markets. This belief dates from the enthusiastic adoption of Smith by free-market politicians and economists a generation ago. In this new biography, Nicholas Phillipson reclaims the author from that ideological fringe. He gives us the rounded man in place of the caricature.

In many ways, the Kirkcaldy-born Scotsman is an unpromising subject for a biographer, because so little is known about him. Very few of the documents that form the biographer's usual raw materials survive in Smith's case - not least because that was how he wanted it. His executors were instructed to destroy unpublished papers. His first biographer, Dugald Stewart, said: "He seems to have wished that no material should remain for his biographers, but what were furnished by the lasting monuments of his genius."

Relatively little of his work survives, therefore. His early lectures are available in the form of notes taken by a couple of students, rather than in their author's version. Given the paucity of original material, this book lacks the personal interest and narrative drive of some other recent accounts of Enlightenment thinkers, such as Jenny Uglow's Lunar Men (2002). Instead, Phillipson has to give us a biography of ideas - and even though a vast amount has been written about Smith's work, the author does a terrific job of situating him in his time and place.

Smith embarked on his intellectual career at the universities of Glasgow and Oxford with the Jacobite Rebellion and its brutal aftermath still a raw memory. The scope of radical Pres­byterian power in Scottish political life was being contested, and the universities were at the centre of the struggle. At the same time, Glasgow was on the way to becoming one of the richest and most dynamic cities in these islands, following the 1707 Act of Union which had expanded its opportunities for trade and given it access to lucrative English markets. In the world of ideas, all was ferment and excitement. Between them, Smith and his esteemed mentor David Hume made Scotland one of the hubs of an age of intellectual discovery. For all the absence of personal details about Smith himself, it's a lively story, sketched out cleverly in this book.

However, Smith's ideas are the heart of the matter for Phillipson. A number of other books published in the past decade (such as Emma Rothschild's Economic Sentiments: Adam Smith, Condorcet and the Enlightenment of 2001) have already tried to undo the free-market caricature of Smith's thought by emphasising his other, less popular masterpiece, The Theory of Moral Sentiments, first published in 1759. Considering the Wealth of Nations alongside this earlier treatise makes it clear that interpreting Smith's work as the writing of an apostle of selfishness is entirely wrong. On the contrary, his views on the economy and markets have to be seen in the context of his ideas about ethics and the sociability of humankind.

Phillipson goes on to show that both books formed just a small part of Smith's ambitious intellectual project. This was to develop an all-encompassing "Science of Man", comprising an empirical explanation of the development of political, social and economic organisation and a laying out of the principles of government and law. Like Hume, Smith drew on the scientific discoveries of the Enlightenment, on the new empiricism, and on all the intellectual ferment of the time, exemplified in groups such as Edinburgh's Philosophical Society. The Moral Sentiments explored the origin of people's sense of ethics and how this shapes society. The Wealth of Nations, which deals with the way society operates, and how people are to prosper and be governed, builds on these moral foundations; indeed, it makes no sense without them.

So great was his ambition that Smith, reportedly both a perfectionist and a slow writer, never realised it. Two later books, covering literature and government, were left unfinished. Tantalisingly, Smith wrote in a letter at the age of 62: "The materials of both are in a great measure collected, and some part of both is put in tolerable good order." But he added that he doubted he would finish, because of the indolence of old age. He was right. All trace of those two volumes has disappeared.

In setting out the scope of his subject's intellectual goals, Phillipson has portrayed an Adam Smith for our times. Perhaps every generation gets the Smith it is looking for. We are certainly living in an era when the idea that self-interest is a principle sufficient for a well-ordered society and economy has lost the appeal it once had. But more than that, this new biography reminds us that the goal of constructing a Science of Man was a driving force of the epoch of discovery in the 18th century. Men like Smith and Hume did not regard the study of human visual perception, say, as a field of endeavour separate from and unrelated to the study of the division of labour. Today, there is once again convergence between the academic disciplines as we learn about the evolutionary roots of patterns of human thought and behaviour. (I am sure that Smith, were he alive today, would have been enthralled by these discoveries - he would likely be an avid participant in TED­Global conferences.)

Smith was, and remains, the very model of an economist. Many critics of economics as a discipline dispute its claim to any kind of scientific status; and yet, even though economists have learned a lesson in humility after recent events (or so, at least, we hope), sceptical empiricism must remain the hallmark of this field of study. The blurring of the boundaries between empirical social science and the human sciences, and between biology, genetics, cognitive science and psychology, should be welcomed warmly. New areas of research such as behavioural and experimental economics are transforming the subject.

There will always be some who regard it as improper to try to apply the scientific method to certain aspects of human life. In their own time, Smith and Hume were frowned upon for their lack of Christian belief, and few believed that analysing society was a properly scientific endeavour. As Phillipson concludes, Smith asked a question both simple and far-reaching:

For all its . . . daring, his philosophy is the work of a modest man who set out to reflect on a simple, apparently unremarkable characteristic of human nature: our desire, when all things are equal, to improve our own lot, that of our families and that of the civil society to which we belong. It was a disposition the day labourer shared with the aristocrat, the young person making his or her way in the world with the sage and elder statesman.

Human nature hasn't changed; Smith's question is still the one to answer.

Adam Smith: an Enlightened Life
Nicholas Phillipson
Allen Lane, 368pp, £25

Diane Coyle runs the business consultancy Enlightenment Economics.

This article first appeared in the 16 August 2010 issue of the New Statesman, The war against science